Introduction
It is necessary for dealings in alienated land or any interest in it to be registered. This is because the National Land Code (“NLC”) requires certain dealings in alienated land or interest in it to be registered under the NLC. This ensures that the dealings can be done quickly, cheaply and with certainty. Dealings in alienated land such as transfer, lease or charge are important because they contribute to the development of the land. The same applies to dealings in interest in alienated land such as transfer or charge of a lease of alienated land.
For context, s5 NLC defines alienated land as any land (including any parcel of a subdivided building) in respect of which a registered title for the time being subsists, whether final or qualified, whether in perpetuity or for a term of years, and whether granted by the State Authority under National Land Code 1965 or in the exercise of powers conferred by any previous land law, but does not include mining land.
Persons/Bodies in Whose Favour Dealings are Capable of Being Effected
Under s205(2) NLC, dealings in land, both registrable and unregistrable, may be effected in favour of certain persons and bodies as stated in Section 43. Namely:
(i) natural persons other than a minor,
(ii) corporation having power under their constitution to hold land,
(iii) sovereigns governments, organizations and other persons authorized to hold land under the Diplomatic and Consular Privileges Ordinance 1957 and;
(iv) bodies expressly empowered to hold land under any other written law.
A few cases illustrating in whose favour dealings are capable of being effected:
Wu Shu Chen & Anor v Raja Zainal Abidin Raja Hussin
Under s43 NLC, a partnership is not a person or body which can hold land in its own name. In any case, it must be considered as dissolved when the death of the partner occured.
Badan Pengurusan Tiara Duta v Timeout Resources Sdn Bhd
The respondent is a company incorporated under the Companies Act 1965. The lease was in favour of the respondent because it was a body capable of taking a lease within the meaning of s43 and s433(B) NLC.
Non-citizens and Foreign Companies
S433B(1)(b) NLC states that no dealings involving agriculture and building lands shall be affected in their favour without prior approval of the State Authority. However, proviso (aa) of the same section provides that the requirement of approval of the State Authority is lifted on any land or any interest of land which is subject to the category ‘industry’ or to any condition requiring its use for industrial purposes.
The rulings on entitlement of foreigner to own property in Malaysia are governed from time to time by the Guidelines issued by the Foreign Investment Committee (FIC) of the Economic Planning Unit, Prime Minister’s Department.
Examples of cases involving foreigners/foreign companies:
Takako Sakao v Ng Pek Yuen & Anor
In Takako Sakao, the appellant, a Japanese citizen and the first respondent decided to acquire a shop house to operate a restaurant business. The appellant’s contention that a trust had arisen in her favour was rejected by the High Court which held that s433B NLC barred the appellant from enforcing any trust that may have arisen in her favour by reason of her contribution towards the purchase price of the shop house. S433B requires a foreigner to obtain the prior approval of the State Authority to acquire land.
CIMB Bank bhd v Abdul Rafi Abdul Rajak & Ors
Abdul Rafi is an Indian national. He is also a permanent resident of Malaysia. The NLC restricts the ownership of land by non-citizens; non-citizens and foreign companies may acquire land only with the approval of the State Authority as per s433B(1)(b) NLC. However, in this case, there was no evidence to show that the approval of the State Authority had been obtained for the acquisition of the land by Abdul Rafi.
Jalaludeen Abdul Aziz v Thrumalingam S Rajadurai & Anor
It was held that s433B(1)(b) NLC applies only to ‘dealings’ and does not apply to a sale and purchase agreement.
Exception
There is an exception under s205(3) NLC whereby subject to subsection (4), no dealing in respect of any alienated land subject to the category “agriculture” or to any condition requiring its use for any agricultural purpose shall be effected if such dealing would have the effect of creating any undivided share of such size that, if the land is to be partitioned in proportion to the several shares, the area of any resulting individual portion would be less than two-fifths of a hectare.
